Iowa’s Rural Mainstreet Index sank more than 12 points to 41.4 in September from August’s 53.7, according to Creighton University’s Rural Mainstreet Index, which was released last month.

The state’s new-hiring index fell to 45.9 from 52.6 in August, and agriculture exports declined 14.8% from $3.61 billion in the first seven months of 2022 to $3.08 billion for the same period in 2023. But the farmland-price index expanded slightly from 59.9 in August to 61.5 in September.

The 10-state region’s overall reading dropped below growth neutral for the first time in six months, falling to 49.5 in September from 50.0 in August.

“This is the weakest recorded reading since March of this year,” Ernie Goss, Creighton University’s chair in regional economics, said in a press release. “Bankers indicated that the biggest challenge to community bank profitability over the next 12 months will be a downturn in farm income.”

About half of bankers who were surveyed expect economic conditions to worsen in the next six months, with about 46.4% indicating that they expect another banking crisis in 2023.

The survey is a snapshot of the economy in 10 states that are dependent on agriculture and energy, and focuses on about 200 communities with an average population of 1,300.

In other regional findings from the report:

Iowa’s Rural Mainstreet Index sank more than 12 points to 41.4 in September from August’s 53.7, according to Creighton University’s Rural Mainstreet Index, which was released last month.

The state’s new-hiring index fell to 45.9 from 52.6 in August, and agriculture exports declined 14.8% from $3.61 billion in the first seven months of 2022 to $3.08 billion for the same period in 2023. But the farmland-price index expanded slightly from 59.9 in August to 61.5 in September.

The 10-state region’s overall reading dropped below growth neutral for the first time in six months, falling to 49.5 in September from 50.0 in August.  

“This is the weakest recorded reading since March of this year,” Ernie Goss, Creighton University’s chair in regional economics, said in a press release. “Bankers indicated that the biggest challenge to community bank profitability over the next 12 months will be a downturn in farm income.”

About half of bankers who were surveyed expect economic conditions to worsen in the next six months, with about 46.4% indicating that they expect another banking crisis in 2023.

The survey is a snapshot of the economy in 10 states that are dependent on agriculture and energy, and focuses on about 200 communities with an average population of 1,300.

In other regional findings from the report:

• The farmland price index climbed to 65.4 from 60.0 in August.
• The farm equipment sales index dipped to 44.0 from 46.0 in August.
• The loan volume index fell to 70.3 from August’s 75.0, the checking deposit increased to 35.2 from 30.8, and the index for certificates of deposit and other savings instruments decreased to 59.3 from 69.2 for August.
• The new hiring index dropped to 49.2 from 51.9 in August. Over the past 12 months, the Rural Mainstreet Economy has expanded jobs by 1.9%, compared to 1.3% for urban areas of the same 10 states.
• The business confidence index sank to 26.8 from 38.9 in August.
• The home sales index fell to 37.0, its lowest reading since March, and down from 59.3 in August. Goss said that higher mortgage rates are beginning to sink home sales.
• The retail sales index decreased from 51.9 in August to 48.1 in September.
• The confidence index dropped to 26.8 from 38.9 in August, representing the most negative outlook recorded since July 2022, Goss said.